ZeePedia Add to Favourites   |   Contact us


Financial Accounting

<<< Previous CASH FLOW STATEMENT 2 Next >>>
 
img
Financial Accounting (Mgt-101)
VU
Lesson-42
CASH FLOW STATEMENT CONTD.
QUESTION # 1
You are given the Balance Sheet of ABC Limited as at June 30, 2001 and June 30, 2002 and its Profit and
Loss Account for the year ended June 30 2002.
Required
You are required to prepare Cash Flow Statement for the given period.
ABC Ltd
Balance Sheet As At June 30 2002
2002 Rs.
2001 Rs.
Rs. `000 Rs. `000
Building at Cost
181,000 140,000
Accumulated Depreciation
36,000 30,000
Written Down Value
145,000 110,000
Plant and Machinery cost
83,000 90,000
Accumulated Depreciation
36,000 35,000
Written Down Value
47,000 55,000
Total Fixed Assets at WDV
192,000 165,000
Long Term Investment
17,000 10,000
Current Assets
Debtors
30,000 21,000
Stock
25,000 40,000
Short Term Deposits
18,000 15,000
Cash and Bank
30,000 24,000
103,000 100,000
Current Liabilities
Creditors
15,000
12,000
Proposed Dividend
18,000
16,000
Tax Payable
9,000
8,000
42,000
36,000
Working Capital
61,000
64,000
Net Assets Employed
270,000
239,000
Financed By
Share Capital
180,000 160,000
Share Premium Account
17,000 12,000
General Reserve
23,000 20,000
Accumulated Profit and Loss
34,000 27,000
Share Holders' Equity
254,000 219,000
Term Finance Certificates
16,000 20,000
Total
270,000 239,000
269
img
Financial Accounting (Mgt-101)
VU
ABC Ltd
Profit and Loss Account For the Year Ended June 30 2002
Rs. `000
300,000
Sales
(231,000)
Cost of Sales
Gross Profit
69,000
Other Income
4,000
73,000
Less: Administrative Expenses
Director's Remuneration
4,000
Depreciation on Building
6,000
Loss on Sale of Machinery
2,000
Other Administrative Expenses
12,000
24,000
Less: Selling Expenses
10,000
Less: Mark up on TFC
2,000
36,000
Profit for the Year Before Tax
37,000
Provision for tax
9,000
Profit after tax
28,000
Acc. Profit Brought Forward
27,000
55,000
Appropriation
Transfer to Reserve
3,000
Proposed Dividend
18,000
21,000
Accumulated Profit Carried Forward
34,000
Additional Information
1. Other income include dividend on Long Term Investment
2. Cost of goods sold includes depreciation for the year on machinery Rs. 5,000.
3. Accumulated Depreciation on the machine disposed off amounts to Rs. 4,000.
270
img
Financial Accounting (Mgt-101)
VU
SOLUTION
ABC Ltd
Cash Flow Statement For the Year Ended June 30 2002
Note
Rs. `000
Net Profit Before Tax
37,000
Adjustment of Non Cash Items
Depreciation
11,000
Loss on Sale of Machinery
2,000
Markup on TFC
2,000
52,000
Less: Other Income
(4,000)
Operating Profit Before Working
Capital Changes
48,000
Working Capital Changes
Reduction in Stock
15,000
Increase in Creditors
3,000
Increase in Debtors
(9,000)
9,000
Cash Flow from Operations
57,000
Markup on TFC Paid
(2,000)
Tax Paid
1
(8,000)
Net Cash Flow From Operating Activities
47,000
Cash Flow From Investing Activities
Dividend Received
4,000
Payment to Acquire Investments  2
(7,000)
Purchase of Fixed Assets (Building)
3
(41,000)
Receipt from Sale of Assets
4
1,000
Net Cash Flow From Investing Activities
(43,000)
Cash Flow From Financing Activities
Issue of Ordinary Shares
20,000
Share Premium Account
5,000
Dividend Paid
5
(16,000)
Repayment of TFC
6
(4,000)
Net Cash Flow From Financing Activities
5,000
Net Increase / (Decrease) in Cash and
Cash Equivalents During The Year
9,000
O/B of Cash and Cash Equivalents
39,000
C/B of Cash and Cash Equivalents
48,000
271
img
Financial Accounting (Mgt-101)
VU
Note # 1
Tax Paid
Provision for Tax
Account Code --------
Particulars
Amount
Particulars
Amount
Dr. (Rs.)
Cr. (Rs.)
Cash
8,000 Bal. B/F
8,000
Balance c/f
9,000
For the year
9,000
Total
17,000 Total
17,000
Note # 2
Payments to Acquire Investments
Investment
Account Code --------
Particulars
Amount
Particulars
Amount
Dr. (Rs.)
Cr. (Rs.)
Bal. B/F
10,000
Cash
7,000
Bal. C/F
17,000
Total
17,000 Total
17,000
Note # 3
Purchase of Fixed Assets
Building Cost
Account Code --------
Particulars
Amount
Particulars
Amount
Dr. (Rs.)
Cr. (Rs.)
Bal. B/F
140,000
Cash
41,000
Bal. C/F
181,000
Total
181,000 Total
181,000
Note # 4
Sale Proceed of Machinery
Machinery at Cost
Account Code --------
Particulars
Amount
Particulars
Amount
Dr. (Rs.)
Cr. (Rs.)
Bal. B/F
90,000 Disposal A/c
7,000
Bal. C/F
83,000
Total
90,000 Total
90,000
Disposal of asset
Account Code --------
Particulars
Amount
Particulars
Amount
272
img
Financial Accounting (Mgt-101)
VU
Dr. (Rs.)
Cr. (Rs.)
Cost
7,000 Accumulated Dep.
4,000
Loss on Sale
2,000
Sale Proceed
1,000
Total
7,000 Total
7,000
Note # 5
Dividend Payable
Dividend Payable
Account Code --------
Particulars
Amount
Particulars
Amount
Dr. (Rs.)
Cr. (Rs.)
Cash
16,000 O/B
16,000
For the Year
18,000
C/B
18,000
Total
34,000 Total
34,000
Note # 6
Repayment of TFC
TFC Account
Account Code --------
Particulars
Amount
Particulars
Amount
Dr. (Rs.)
Cr. (Rs.)
Cash
4,000 O/B
20,000
C/B
16,000
Total
20,000 Total
20,000
273
Table of Contents:
  1. Introduction to Financial Accounting
  2. Basic Concepts of Business: capital, profit, budget
  3. Cash Accounting and Accrual Accounting
  4. Business entity, Single and double entry book-keeping, Debit and Credit
  5. Rules of Debit and Credit for Assets, Liabilities, Income and Expenses
  6. flow of transactions, books of accounts, General Ledger balance
  7. Cash book and bank book, Accounting Period, Trial Balance and its limitations
  8. Profit & Loss account from trial balance, Receipt & Payment, Income & Expenditure and Profit & Loss account
  9. Assets and Liabilities, Balance Sheet from trial balance
  10. Sample Transactions of a Company
  11. Sample Accounts of a Company
  12. THE ACCOUNTING EQUATION
  13. types of vouchers, Carrying forward the balance of an account
  14. ILLUSTRATIONS: Ccarrying Forward of Balances
  15. Opening Stock, Closing Stock
  16. COST OF GOODS SOLD STATEMENT
  17. DEPRECIATION
  18. GROUPINGS OF FIXED ASSETS
  19. CAPITAL WORK IN PROGRESS 1
  20. CAPITAL WORK IN PROGRESS 2
  21. REVALUATION OF FIXED ASSETS
  22. Banking transactions, Bank reconciliation statements
  23. RECAP
  24. Accounting Examples with Solutions
  25. RECORDING OF PROVISION FOR BAD DEBTS
  26. SUBSIDIARY BOOKS
  27. A PERSON IS BOTH DEBTOR AND CREDITOR
  28. RECTIFICATION OF ERROR
  29. STANDARD FORMAT OF PROFIT & LOSS ACCOUNT
  30. STANDARD FORMAT OF BALANCE SHEET
  31. DIFFERENT BUSINESS ENTITIES: Commercial, Non-commercial organizations
  32. SOLE PROPRIETORSHIP
  33. Financial Statements Of Manufacturing Concern
  34. Financial Statements of Partnership firms
  35. INTEREST ON CAPITAL AND DRAWINGS
  36. DISADVANTAGES OF A PARTNERSHIP FIRM
  37. SHARE CAPITAL
  38. STATEMENT OF CHANGES IN EQUITY
  39. Financial Statements of Limited Companies
  40. Financial Statements of Limited Companies
  41. CASH FLOW STATEMENT 1
  42. CASH FLOW STATEMENT 2
  43. FINANCIAL STATEMENTS OF LISTED, QUOTED COMPANIES
  44. FINANCIAL STATEMENTS OF LISTED COMPANIES
  45. FINANCIAL STATEMENTS OF LISTED COMPANIES